Tata group firms lose $7 billion M-cap since mistry's dismissal

Tata Group companies have suffered a combined market cap erosion of more than $7 billion, or around `50,000 crore, in the past two weeks since the eruption of an internal spat following the sudden dismissal of Cyrus Mistry as Tata Sons chairman.Shares of most of Tata Group companies have underperformed their peers: TCS has underperformed Infosys; Tata Motors has underperformed Maruti Suzuki and Mahindra & Mahindra; Indian Hotel has underperformed EIH Hotels; Tata Steel has underperformed SAIL; and Tata Power has underperformed Adani Power and NTPC.

Fund managers and analysts that ET spoke with say Mistry was doing all the right things for shareholders, mainly deleveraging and making businesses more efficient.With him gone, it's felt that the earlier culture of making emotional decisions keeping the group image in mind may return, thus adversely impacting shareholders' returns.Hence the fall in share prices. Amongst the larger Tata Group companies with market capitalisation of more than `10,000 crore, those that were in the process of restructuring and reducing debt have been impacted the most. Tata Global Beverages, Indian Hotels, Tata Chemicals, Tata Communications and Tata Power have all lost more than 10% of market capitalisation since the dismissal of Mistry .

Smaller group companies such as TRF and Tata Metaliks have lost 20 to 25% of their market capitalisation.

Several people ET spoke with about Ericsson’s India operations, including its current and former employees, said the Stockholm-based firm has reduced headcount in the last one year or so across functions, in line with its global restructuring.